The Week Ahead

The Week Ahead

India to host Nepalese Prime Minister as tensions continue with China over Doklam. UK releases more Brexit position papers, though impact is likely to be muted. Jackson Hole Summit will bring together economic experts and Federal Reserve bankers. All in The Week Ahead.

India to host Nepalese Prime Minister as tensions continue with China over Doklam

This Wednesday, Nepalese Prime Minister Sher Bahardur Deuba will begin a 5-day trip to India, including meeting with Prime Minister Modi. India and Nepal have close ties already, but the meeting between the two is meant to further affirm the close links between the two governments.  These meetings will also occur on the backdrop of continuing tensions between India and China over control over the Doklam plateau.

India does not have a formal claim to the Doklam plateau — it is a contested area on the border between China and the kingdom of Bhutan — but India is acting as Bhutan’s proxy supporter due to an agreement that compels Bhutan to accept foreign policy guidance from India. Prime Minister Modi will likely try to gain support from Nepal, another nation with Chinese and Indian borders, in its diplomatic disputes with China. India recently received a substantial boost in this endeavor when Japan extended its support to India/Bhutan on its claims to Doklam, to the surprise of the Chinese government, which had assumed the Japanese government would be fairly ambivalent and indicated as much to the Indian government. China may also attempt to shore up its own support from regional players when it hosts Indonesia in Beijing for high-level economic dialogues.

UK releases more Brexit position papers, though impact is likely to be muted

This week, the UK government is expected to release up to three Brexit position papers, in addition to the two it released last week on customs and the Irish border. The position papers are designed to convey a degree of seriousness in their negotiating position with the European Union, as its pre-negotiating posturing and early stage negotiating positions were viewed as not particularly serious by their EU counterparts and hindered development of actual negotiations.

That does not mean, however, that the EU will view the UK position papers as the outcomes they are prepared to accept, or even view as legally permissible. Although the EU noted that the position papers were a “positive step” in the development of negotiations, this did not mean the EU delegation or other major players agreed with the conditions set down thus far by the UK government. EU leaders have already indicated they would not agree to the UK negotiating or finalizing free trade agreements while the UK is in a transitional customs unionwith the EU, and Northern Irish politicians in Sinn Fein and the SDLP panned the Northern Ireland proposals as light on concrete action and a clear plan for how to maintain the UK’s tenuous position outside the customs/trade zone and maintaining the commitments of the Good Friday Agreement. The position papers this week, which are expected to be on how to deal with confidential EU information, Brexit enforcement and dispute resolution mechanisms, and goods supply chains, may receive a more welcome response.

Jackson Hole Summit will bring together economic experts and Federal Reserve bankers

This Thursday, Federal Reserve bankers and economists from around the world will meet in Jackson Hole, Wyoming for its yearly monetary policy symposium. Given the large confluence of central bank officials, most market analysts will expect a steady stream of thoughts on the short and medium-term futures for monetary policy, particularly in the United States. What had previously been a fairly confident Federal Reserve, with sufficient confidence in employment and wage growth to raise interest rates multiple times over the last year, the last monetary policy meeting minutes revealed a much more divided Federal Reserve board on the future of rate hikes.

Many, perhaps detecting the substantial political uncertainty swirling around Washington, DC, have expressed skepticism on moving to raise interest rates too quickly. Markets have also begun shedding the confidence that had been underpinned by a national government unified under one, ostensibly pro-business, political party. The failure of the House and Senate Republicans to agree on a healthcare bill after 7 months of trying sucked substantial time out of the legislative calendar to focus on issues that could broadly boost the U.S. economy, like a tax reform package or an infrastructure bill. With a budget deadline and a debt ceiling vote looming-both by the end of September-without major negotiations or even negotiating objectives from the Republicans, both the Federal Reserve and markets may hold off on moving aggressively despite fairly good employment and job growth numbers. The Jackson Hole Summit will represent a great opportunity for market reporters to gauge the dovish members of the Federal Reserve to see what indicators they will look for before moving forward with further interest rate hikes.


The Week Ahead provides analytical foresight on the economic consequences of upcoming political developments. Covering a number of future occurrences across the globe, The Week Ahead presents a series of potential upside/downside risks, shedding light on how political decisions affect economic outcomes.

This edition of The Week Ahead was written by GRI Senior Analyst Brian Daigle.

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